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Jessica Mindell, founder of Jessica's Natural Foods, used to
hand-deliver her gluten-free granola. Now it's sold in Whole
Foods and other grocery chains.
Photo courtesy of the company

In May 2009, Jessica Mindell was all set to bake the first batch
of gluten-free granola she would sell under the label of her new
business, Jessica's Natural Foods. She borrowed her
father-in-law's SUV and drove all the way from Birmingham,
Mich. to Chicago, where two contracted bakers were waiting for
her.

Mindell spent Memorial Day weekend making hundreds of pounds of
granola. Then she packaged the finished product in 900 bags,
loaded them into the SUV and drove back to Birmingham, where she
started cold-calling local grocery stores and filling orders.

"That's how I did things for a long time early on," says Mindell,
whose husband's gluten sensitivity inspired her granola
creations. "I would go store-to-store and hand-deliver the
granola."

Today, Jessica's Natural Foods is a success story of the gluten-free retail
market, which is currently worth an estimated $4.5 billion
worldwide. Her granola is stocked in Whole Foods in the
Midwest as well as a number of Michigan stores and chain
groceries. Her projected sales for 2012 are $550,000, up
$100,000 from last year.

Sales of gluten-free food and beverages, once decidedly niche
products, grew 30% year over year in the United States from 2006
to 2010, according to market research firm Packaged Facts. The
firm projects U.S. sales alone will reach $5.6 billion by 2015.
For an increasing number of business owners, this growing market
presents an unmissable opportunity.

Take entrepreneur Scott Adams of the Gluten-Free Mall. A celiac sufferer, he
created the first informational website dedicated to the
disease in 1995, and launched the first e-commerce site for
gluten-free products three years later. It was "a market that
wasn't being tapped at that time," Adams says.

Gluten-free diets have traditionally been the preserve of people
with celiac disease, an autoimmune disorder that causes
intestinal damage when gluten, a component in the cereal grains
wheat, rye and barley, is eaten.

Medical experts estimate that one in 133 Americans, or more than
two million people, have celiac disease, although only about
200,000 have been diagnosed so far. However, awareness of the
condition is "increasing tremendously," says Lola O'Rourke, a
dietician at the non-profit Gluten Intolerance Group. An additional 18
million people suffer from non-celiac gluten sensitivity and
would also benefit from a gluten-free diet, according to Susie
Flaherty, spokeswoman for the University of Maryland Center for Celiac
Research. "If you're talking about growth markets, I'd say
it's pretty exponential," she says.

Beyond medical reasons, gluten-free diets have become a lifestyle
choice, popularized by professional athletes like Green Pay
Packers running back James Starks and celebrities like Kim
Kardashian. "Forget about the South Beach Diet. Now it is the
gluten-free diet that is fashionable," says Dr. Alessio Fasano,
founder and director of the Center for Celiac Research. A
gluten-free diet offers no health benefit to average people, Dr.
Fasano says, but it might give athletes at the highest levels of
sport an improvement in performance.

While high-profile dieters have raised awareness of the
gluten-free lifestyle, Darin Alpert, the chief operating officer
of mobile app Find Me Gluten Free, has based his
business on the outsize social influence of celiacs and others
with medically restricted diets.

"Gluten-free consumers typically dictate where their [group is]
going to eat. They have veto power," Alpert says. "So when
someone is searching on our app, it really is a pretty powerful
market to get to, especially for advertisers. You're not just
getting the gluten-free customers, you're getting their friends
and families."

Find Me Gluten Free is essentially a search tool for gluten-free
restaurants, bakeries and other businesses in your area, complete
with ratings, reviews, contact information and directions. It
works nationwide and, with over 125,000 downloads, is first among
gluten-free apps in both the iTunes store and Google Play, the
Android app market.

In April, billionaire entrepreneur Mark Cuban invested in Find Me Gluten
Free, making it possible for Alpert and his partner, Jason
Elmore, who suffers from celiac disease, to make growing the
app their full-time job. The app is already profitable, Alpert
says, thanks to featured advertising from gluten-free
businesses and Groupon-style deals on both the national and
the local level. Every day, users suggest new shops and
restaurants they would like to see added to the app's search
results.

As the market continues to grow, large brands are entering the
fray. In 2011, General Mills launched GlutenFreely, an information and
e-commerce site competing directly with the Gluten-Free Mall.
Says Adams, who owns the website Celiac.com, "I've seen it go from the
extreme of almost no competition, where I could buy almost any
domain name I wanted, to what it is now, which is extreme
competition, where the players now getting into it are huge."

Dr. Fasano is even fielding calls from venture capitalists
wanting to know whether they should invest in the gluten-free
market. He predicts long-term stability. The number of people who
fall away when gluten-free is no longer fashionable, he says,
"will be counterbalanced by the number of people with celiac
disease who are going to be diagnosed."